California DOC Contract Registry Pharmacist Accused of Diverting 93% of Referrals to His Own Corporation
California's State Auditor has found that a pharmacist, who was contracted by three state prisons to select other pharmacists from a state-approved registry to perform services at the facilities, directed 93% of such referrals worth $1.1 million to pharmacists on his own firm's registry. Fees and costs gained from these "in-house" referrals earned him an estimated $220,000 over a one-year period.
David Elder, proprietor of D.F. Elder Pharmacy, Inc., was under contract for seven years to provide subcontracted pharmacists to three state prisons as needed. His task, essentially acting as a broker, was to select candidates based on lowest bid rates from among several registry lists approved by the Department of Correction and Rehabilitation (CDCR).
Elder claimed that the use of his own company's registry had been approved by the late John Klavich, Chief Medical Officer at Corcoran State Prison, who died in a motorcycle accident in 2005. The Auditor's attention was drawn to the fact that Elder almost exclusively selected candidates from his own firm's registry list.
Of the $1.1 million in annual billings reviewed, approximately 20% was retained by his company, Elder admitted. Nonetheless, he denied any wrongdoing. "If you know anything about state investigators, these guys are bozos," he said. "They're looking for a patsy and I'm not it. I didn't do anything wrong or out of line."
State Auditor Elaine Howell implicitly disagreed. She cited possible violations of the state's Political Reform Act, and in April 2007 filed a complaint against Elder with the Fair Political Practices Commission.
Source: Sacramento Bee